$15.7 million drop is only part of the salary-cap story

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The reduction in the 2021 salary cap from $198.2 million to $182.5 million — an unprecedented $15.7 million reduction per team — creates obvious challenges for NFL teams. Those challenges are exacerbated by the fact that NFL teams have in recent years become accustomed to minimum cap growth of $10 million per year.

Thus, the difference from expected to actual 2021 cap isn’t $15.7 million. It’s at least $25.7 million. Teams negotiate contracts in reliance on the anticipated cap growth. Before the pandemic, there was no reason to think the cap wouldn’t continue to climb, by at least $10 million.

Indeed, in every year from 2013 through 2020, the cap increased by at least $10 million annually. That growth quite possibly will return in 2022.

But even if the cap goes up by $10 million from 2021 to 2022, it’ll still be at least $25.7 million behind where it would have been, since the growth in 2022 would have been added to the growth in 2021.

That’s why so many teams are scrambling to deal with a shrinking cap. whether they’re trying to get up the cap or trying to have enough cap space to do business in free agency and then to sign draft picks, this $25.7 million change is creating a major pinch for most teams.

31 responses to “$15.7 million drop is only part of the salary-cap story

  1. The players and owners should have worked out a way to freeze the cap for this one year. May wwith both sides taking a loss. Because they didnt it is going to hurt teams for the next 5 years instead of just having a one year sacrifice.

  2. Cap reduction due to ONE year of money lost by nfl compared to how many years of profits?
    How bogus is that?

  3. “That’s why so many teams are scrambling to deal with a shrinking cap”
    ——————–

    As Andrew Brandt wrote on SI (former Packers VP), no team is “scrambling” – they’ve all been preparing for the last nine months on the business side and already know what their plan is.

  4. Large signing bonuses and small salary cap numbers will be the order of the day in the new salary cap NFL.

  5. Why not just pull future revenues forward into the cap calculations to help smooth things out? I get owners don’t want to pay for tomorrow’s earnings today but it’s that or enjoy your team of RFAs going 4-12

  6. The caps going down and im seeing less articles suggesting that salaries should be tied to a percentage of the cap. I call this a win

  7. The present value (PV) of the cap decrease is less than 1million per team based on the new TV contract forthcoming. What this means is that a record number of 1 year contracts will be signed by free agents this year.

  8. Yeah…the Dallas Cowboys don’t appear to be scrambling. Unless you mean all the players they’re going to be asking to take less money so Dak can feel good.

  9. Agree with the Andrew Brandt take. All the teams have to do is do what every team does, is make the players restructure their contracts. Only thing that matters is the guaranteed money. if there is a big increase in a player’s contract, player never sees it.

  10. I remember hearing about a proposal to allow teams to borrow future cap space (up to $10M) for up to 5 years. I think that would have been a good way mitigate the impact that loss of revenue caused the shrinkage of the 2021 salary cap. At least it would have given teams more flexibility.

  11. Many people in this country had a 100% reduction in their pay due this country’s inept inability to control the virus which ran rampant. It’s hard to garner much sympathy for the millionaire players and billionaire owners.

  12. Give me a break- Billionaires seeking record tv deals and they are going to pass on losses to players? Shameful

  13. I remember the raiders post-Jamarcus Russell (and post-Al Davis) had a couple of lean years getting their cap situation under control. One thing interesting about Belichick is, in one year post-Brady, he’s managed to get the Pats into the 3rd best cap situation of any team. It’ll be interesting to see what he does with the situation.

  14. How about this novel idea? They all stop being so greedy and agree to take big pay cuts — from the owners on down???
    That way the fans — who end up footing the bill for everything one way or another — would get the break they deserve.

  15. How much did owners finagle the cap upward? (What would straight application of the cap formula have resulted in for 2021?)

  16. Well figuring that the owners lost on avg 1 mill per home game last year….

    Just wait till you see the NEW ticket prices!!!!

  17. Somehow if the owners were really concerned why don’t they just bump it 10M above last year and run with it? I don’t the the NFLPA would object.

    But that said, frankly I think the owners are fine with the drop, but the problem is there are going to be a lot of FA’s disappointed at offers that are less. I’m guessing that a lOt of those that are on or from good teams will stay with those teams while those that were on crap teams will take 1 year deals with other teams just to get away from their old team.

  18. I’m glad the Patriots spent last year getting cap room. It sucked, but now it’s paying off. Since they like budget guys anyway, they will be fine.

  19. It’s just going to result in some free agents not getting the kind of big payday they would have in recent years.
    Meanwhile, some teams have qbs consuming 25% of the cap.
    The outrageous contracts will doom teams if this doesn’t change.

  20. This just means it’s going to be a fun free agency period! Well, maybe not if you’re an overpaid veteran.

  21. These teams are rolling in money and they’re going to get richer with the new TV deals and they reduce the salary cap????? That ain’t right!

  22. The other solution would have been to keep the cap the same and -GASP- the owners take the hit.

  23. During the pandemic, I’m regularly seeing big businesses making personnel cuts, while reporting record profits/lucrative TV deals. Some of the double speak becoming normal is fascinating.

  24. The smart money move is to adjust for a one-year anomoly with structured contracts that also reflect a one-year anomaly.

    I’m operating under the (increasingly likey) assumption that 2021-2022 season will look almost entirely normal from a revenue standpoint. Ergo the cap rise in 2022 will be more the precedent $10 million: more likely it willb e close to $25.7 million.

    So it should look like the stock market: a big V.

    But due to timing, yes, this is the down year, but a wise team could restructure key players contracts for much bigger payouts in 2022 cap figures and probably be safe, and many players would be inclined to accepts such a restructuing if hte alternative is to be cut and become a free agent in a year when the cap is so low.

    From a player perspective: if you’re cut you need to sign either a one year deal only, OR insist on signing a longer term contract only if it anticipates a high escalation in 2022.

  25. Let me get this straight. The salary cap is going down because the owners aren’t making as much money as they did before. The players will have to take less money, not because they are taking less risk, or playing poorly, but, because the owners will not make as much profit. They will ask the players to play a longer 17 game season and take less money. Can’t have the ultra rich suffer a loss of revenue now can we?

  26. I remember a few years ago a certain writer harping, whenever the opportunity arose, to attach star player’s salaries to the cap by a percentage instead of a set amount. Would’ve been a terrible move in hindsight right? I also remember that same writer praising the Wentz and Goff contracts as forward thinking and getting out in front of a problem that more teams should embrace. I also remember this same writer saying Le’veon Bell was doing right by using his leverage sitting out a season and overall didn’t he end up losing 20+ million dollars that way?

  27. raiderdave31 says:
    March 11, 2021 at 1:38 am
    Well figuring that the owners lost on avg 1 mill per home game last year….

    Just wait till you see the NEW ticket prices!!!!
    ————————
    OMG! the billionaire owners lost up to $10 million dollars on ticket sales last year! I wonder if they noticed?

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